ACAROLINACANISSUEBRIEF

INEXCELLENCE
INVESTING
INVESTINGIN
EXCELLENCE
A GUIDE TO ATTRACTING, RETAINING AND
REWARDING EXCEPTIONAL TEACHERS IN
THE TAR HEEL STATE
This report was published
in February 2014 by CarolinaCAN:
The North Carolina Campaign for
Achievement Now.
To order copies of this report,
please contact CarolinaCAN
at info@carolinacan.org
CarolinaCAN: The North Carolina
Campaign for Achievement Now
www.carolinacan.org
Design & Layout
house9design.ca
3 CAROLINACAN INVESTING IN EXCELLENCE
Table of contents

Executive summary 4
Introduction 5
1 The problem with teacher pay today 6
2 What the research says 9
3 Policy recommendations 14
Conclusion 18
4 CAROLINACAN INVESTING IN EXCELLENCE
Executivesummary
Exceptional teachers look for competitive base salaries, nancial rewards
for excellence, and opportunities for real career growth when deciding
whetherand whereto teach.
Yet in North Carolina, our statewide policies are actually discouraging
great educators from choosing to enter or stay in our classrooms. The
states teacher compensation system sufers from two fundamental
shortcomings: base pay has fallen too low, and the antiquated salary
schedule fails to use state dollars to reward and incentivize excellence.
Starting teachers in North Carolina today will earn less than their
peers in every other southeastern state, and may have to teach for six
years before receiving their rst raise. They would be better of mov-
ing (or merely driving farther) to teach in a neighboring state, where
their salaries would automatically increase between 4 and 15 percent,
or to one of the 15 states that ofer opportunities and nancial rewards
for excellence.
North Carolinas students are paying the price. Reviewing the re-
search on and best practices for efective compensation systems, this
issue brief outlines two major recommendations for improving the
states salary schedule:
1. Make a long-term commitment to signicantly increase base pay.
Specically, we encourage the governor and state legislators to:
Increase base pay for all teachers by 4 percent in 2014.
Increase starting pay for teachers with a bachelors degree to $36,000
by 2016, which would put beginning teachers ahead of their peers in
South Carolina, Georgia and Tennessee.
Commit to ongoing investments so that by 2020, North Carolina is the
leader in the southeast in both starting and average teacher salaries.
2. Restructure the state salary schedule to pay for what matters, so
that our great teachersand the students they teachcan ourish.
Specically, we recommend the state:
Accelerate salary increases in the early years of a teachers career, when
teachers tend to grow the most in terms of their skill and impact on stu-
dent learning.
Provide premiums to teachers who earn advanced degrees, when those
degrees contribute to increased student achievement.
Exceptional
teacherslookfor
competitivebase
salaries,nancial
rewardsfor
excellence,and
opportunities
forrealcareer
growthwhen
decidingwhether
andwhere
toteach.
5 CAROLINACAN INVESTING IN EXCELLENCE
Create career pathways that let teachers grow in their careers, reach
more students and earn accompanying salary increases.
Provide additional incentives for teachers in hard-to-staf schools
and subjects.
The brief also recommends ways to make each of these changes aford-
able, and to give districts the exibility they need to integrate these
principles into local pay systems while still meeting local needs.
Introduction
For students, it pays to learn from an excellent teacher. Students with
efective teachers are more likely to attend college, earn higher salaries
and even save for retirement.1
But in North Carolina today, it doesnt pay to be that excellent teach-
erat least not in economic terms. Teachers in our state earn nearly 20
percent less than their peers across the country, which is discouraging
given that teacher salaries have slipped nationwide over the last decade.
In fact, one of the easiest ways for North Carolina teachers to earn a
raise is to leave the state: by moving (or merely driving farther) to teach
in a neighboring state, a teacher automatically receives a 4 to 15 percent
salary increase.2
North Carolina cannot attract and retain world-class educators
without an adequate compensation system. Research shows that high-
performing teachers seek higher base salaries, the ability to earn nancial
rewards for their excellence and opportunities to advance in their careers.3
Yet few of those incentives exist in North Carolina today. Excellent
teachers are better of seeking work in one of the 15 states that ofer
teachers nancial rewards for efective teaching, or in one of the states
that provide better-dened leadership and growth opportunities.4
Teacher pay in North Carolina wasnt always this bad. As recently
as 2000, our average teacher salary was ahead of 28 states, including
neighboring South Carolina, Tennessee and Virginia. With the right
reforms, we will not only be competitive again, we will lead the nation
in our ability to recruit, retain and reward great teachers.
This issue brief will review the current problems with North Caro-
linas compensation system, as well as the two major avenues for solving
those problems:
1 Raj Chetty, John N. Friedman, and
Jonah E. Rockof, The Long-Term
Impacts of Teachers: Teacher Value-
Added and Student Outcomes in
Adulthood, National Bureau of
Economic Research (2011), accessed
January 14, 2013, http://obs.rc.fas.
harvard.edu/chetty/value_added.pdf.
Bymoving(or
merelydriving
farther)toteach
inaneighboring
state,NC
teacherscan
automatically
receivea4to15
percentsalary
increase.
2 Estimated average annual salary
of teachers in public elementary
and secondary schools, by state:
Selected years, 196970 through
20122013, National Center for
Education Statistics, United States
Department of Education Institute
of Education Sciences, accessed
January 21, 2014, http://nces.ed.gov/
programs/digest/d13/tables/
dt13_211.60.asp.
3 TNTP, The Irreplaceables:
Understanding the Real Retention
Crisis in Americas Urban Schools,
(New York: TNTP, 2012), accessed
January 21, 2014, http://tntp.org/
irreplaceables.
4 National Council on Teacher
Quality, State of the States 2013:
Connect the Dots: Using evaluations
of teacher efectiveness to inform
policy and practice, (Washington,
D.C.: National Council on Teacher
Quality, 2013), accessed January 21,
2014, http://www.nctq.org/
dmsStage/State_of_the_States
_2013_Using_Teacher_Evaluation
s_NCTQ_Report.
6 CAROLINACAN INVESTING IN EXCELLENCE
1. Signicantly increasing base pay for all teachers.
2. Restructuring the state salary schedule to reward teachers for ex-
cellence, give them opportunities to advance and help schools ll
hard-to-staf positions.
Some advocates have called for salary increases, while others have
focused on reforming the state salary schedule. This issue brief empha-
sizes the need for both approaches, together: dramatic increases in
average teacher salaries, along with a more strategic formula for allo-
cating precious state dollars. Only then will we be able to create a system
in which great teachers want to enterand stayin our classrooms.
Theproblemwithteacher
paytoday
Today in North Carolina, excellent teachers dont get the compensation
they deserve for their hard work and success with students. Take Leslie
Ross, for example. Ms. Ross has been recognized in her community and
nationally for her work at Ben L. Smith High School and Allen Middle
School in Greensboro. Among other successes, she won The New Teacher
Projects 2012 Fishman prize, which honors exceptional teachers work-
ing in high-poverty schools.5
Despite that recognition and success, Ms. Ross will never have the
opportunity to make what a teacher in Memphis, Tennessee can make,
even if she accumulates more than 30 years of experience in North Car-
olina. A teacher like Ms. Ross can earn up to $100,000 annually under
Shelby Countys pay system,6 while the same teacher in North Carolina
will be fortunate to approach half of that.7
Teachers like Ms. Ross also face obstacles to growing as educators.
When Ms. Ross decided to become a teacher leader for Allen Middle
Schoola decision she says she made to increase her impact from 60
kids a year to 600she had to leave the classroom and take a pay cut.
The kind of discouragement Ms. Ross faced has impacted many other
teachers like her, and the states ability to retain its teachers has suf-
fered as a result. In the 20122013 school year, the teacher turnover
rate topped 14 percenta ve-year high. Of those teachers who left
1
5 Fishman Prize for Superlative
Classroom Practice, TNTP, accessed
January 29, 2014, http://tntp.org/
shman-prize/winners/shman-
prize-2012.
6 Lauren Lee, Teacher pay to be
based on student performance,
May 9, 2013, WHBQ FOX 13
Memphis, accessed January 21, 2014,
http://www.myfoxmemphis.com/
story/22137072/teacher-pay-to-be
-based-on-student
-performance#axzz2qPCpnACN.
7 Fiscal Year 20132014 North
Carolina Public School Salary
Schedules, North Carolina
Department of Public Instruction/
State Board of Education, accessed
January 21, 2014, http://www
.ncpublicschools.org/docs/fbs/
nance/salary/schedules/2013
-14schedules.pdf.
Byincreasing
averageteacher
salariesand
usingamore
strategicformula
forallocating
statedollars,we
cancreatea
systeminwhich
greatteachers
wanttoenter
andstayinNC
classrooms.
7 CAROLINACAN INVESTING IN EXCELLENCE
their schools, only about 20 percent moved to another school in North
Carolina. Ten percentmore than 1,300 teachersresigned to teach
in another state or quit because they were dissatised with teaching or
wanted a career change.8
At the heart of the states high turnover rate lie two fundamental
issues with the state teacher compensation system: base pay has fallen
too low, and the antiquated salary schedule fails to use state dollars to
reward and incentivize excellence.
Inadequate base pay
North Carolina is home to some of the lowest paid teachers in the country.
During the 20122013 school year, the state ranked 47
th
out of 50 in av-
erage annual teacher salary.9 We also fall behind neighboring states, our
primary competitors in the education labor pool. On average, teachers
can expect to make an extra $7,000 per year in Georgia, $4,000 more in
Virginia, $2,300 more in Tennessee and $2,000 more in South Carolina.
These low gures make it difcult to recruit promising college grad-
uates into the classroom, especially when those graduates have other,
more lucrative options in other professions. Table 1 compares the average
salary of a North Carolina teacher to the average salaries of other pro-
fessions in the state in 2012.10
The teaching profession falls behind many other industries in terms
of what it can ofer prospective employees. The average salary for North
Carolina lawyers, for example, is nearly triple what it is for teachers. A
new professional can also expect to earn more as a public relations spe-
cialist, a registered nurse, an accountant or an engineer.
The rst step to attracting and retaining excellent teachers in North
Carolina is increasing base pay enough to make the profession compet-
itive with teaching in nearby states and to put it at least in the ballpark
of the other professions competing for top college graduates.
An outdated salary schedule
In addition to not paying its teachers enough, North Carolina does not
put the dollars it does spend toward the things that matter most:
1. The North Carolina salary schedule includes 31 steps that reward
teachers for experience primarily in the later years of their career. Due
to recent pay freezes, a teacher who started their career in 20082009
is still making the salary of a rst-year teacher. Yet the rst ve years of
teachers career tend to be the years she grows the most. 11
8 Report to the North Carolina
General Assembly: 20122013
Annual Report on Teachers Leaving
the Profession, North Carolina
Department of Public Instruction/
State Board of Education,
accessed January 21, 2014, https://
eboard.eboardsolutions.com/
meetings/TempFolder/Meetings/
Attachment%201%20-%20
2012-13%20Teacher%20Turnover%20
Report_197853sgxrx555ptk45qnr
qgrbm.pdf.
10 May 2012 State Occupational
Employment and Wage Estimates
North Carolina, Bureau of Labor
Statistics, United States Department
of Labor, accessed January 21, 2014,
http://www.bls.gov/oes/current/
oes_nc.htm.
9 Estimated average annual salary
of teachers in public elementary
and secondary schools, by state:
Selected years, 196970 through
20122013, National Center for
Education Statistics, United States
Department of Education Institute
of Education Sciences, accessed
January 21, 2014, http://nces.ed.gov/
programs/digest/d13/tables/dt13
_211.60.asp.
Ateacherwho
startedher
careerin2008
2009isstill
makingthesalary
ofarst-year
teacher.
11 Jennifer King Rice, The Impact
of Teacher Experience: Examining
the Evidence and Policy Implications,
National Center for Analysis of
Longitudinal Data in Education
Research (2010), accessed January
24, 2014, http://www.urban.org/
uploadedpdf/1001455-impact-teacher
-experience.pdf.
8 CAROLINACAN INVESTING IN EXCELLENCE
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9 CAROLINACAN INVESTING IN EXCELLENCE
2. North Carolina is phasing out pay supplements for all masters degrees.
For most grades and subjects, this is a wise and welcome change, as re-
search does not demonstrate correlation between advanced degrees
and improved student performance. But for teachers in the upper
grades in certain subjects, there is a connectionone worth rewarding.
Upper-grade teachers who hold advanced degrees in their eld have
consistently shown to be more efective at improving student achieve-
ment than their counterparts.12
3. Teachers who grow and take on more responsibility do not receive pay
increases for doing so. We provide few meaningful opportunities for
career growth and increased reach, with accompanying increases in
pay. Yet these opportunities are a key factor in attracting and retaining
excellent teachers.13
4. We dont pay more for hard-to-staf positions. We do not provide pay pre-
miums for positions the market has shown consistently more difcult
to staf, such as jobs in rural or high-need urban areas, special educa-
tion and competitive elds such as STEM. Paying employees more for
hard-to-staf positions is common practice in other elds,14 and can
improve student performance and close achievement gaps.15
North Carolina can become a leader in attracting, retaining and reward-
ing excellent teachersbut to do so well need to reform the teacher
salary schedule so that it pays for what actually matters.
Whattheresearchsays
Teachers and prospective teachers, just like everyone else, respond to
nancial incentives in deciding whether to join, leave or move within
the teaching profession.16 To attract and retain top applicants in any
eld, employers must pay higher wages, ofer better benets and provide
better working conditionsincluding career growth opportunities
than their competitors.
In public education, however, weve long prioritized predictability
and fairness in teacher pay over competitiveness and excellencerem-
nants of a time when teachers were generally viewed as interchangeable
cogs.17 As a result, weve shackled ourselves with an outdated salary
schedule that deters the best and brightest candidates from joining the
2
12 Andrew J. Wayne and Peter
Youngs, Teacher Characteristics
and Student Achievement Gains:
A Review, Review of Educational
Research 73 (2003): 89122.
13 TNTP, The Irreplaceables:
Understanding the Real Retention
Crisis in Americas Urban Schools,
(New York: TNTP, 2012), accessed
January 21, 2014, http://tntp.org/
irreplaceables. See also Joe
Ableidinger and Julie Kowal,
Shooting for Stars: Cross-Sector
Lessons for Retaining High-
Performing Educators, Public Impact
(2010), accessed January 21, 2014,
http://publicimpact.com/shooting-
for-the-stars-cross-sector-lessons-
for-retaining-high-performing-
educators/.
14 Julie Kowal, Bryan C. Hassel, and
Emily Ayscue Hassel, Financial
Incentives for Hard-to-Staf Positions:
Cross-Sector Lessons for Public
Education, Center for American
Progress (2008), accessed January
21, 2014, http://www.americanprogress.
org/issues/education/report/2008
11/20/5197/nancial-incentives-for-
hard-to-staf-positions/.
15 Steven Glazerman, Ali Protik,
Bing-ru Teh, Julie Bruch, and
Jefrey Max, Transfer Incentives
for High-Performing Teachers:
Final Results from a Multisite
Randomized Experiment, National
Center for Education Evaluation and
Regional Assistance, United States
Department of Education Institute
of Education Sciences (2013),
accessed January 21, 2014, http://
ies.ed.gov/ncee/pubs/20144003/
pdf/20144003.pdf.
16 Charles T. Clotfelter, Helen F.
Ladd, and Jacob L. Vigdor, Teacher
Mobility, School Segregation, and
Pay-Based Policies to Level the
Playing Field, National Center for
Analysis of Longitudinal Data in
Education Research (2010),
accessed January 21, 2014, http://
www.urban.org/uploadedpdf/
1001429-teacher-mobility.pdf. See
also Edward P. Lazear, Teacher
Incentives, Swedish Economic
Policy Review 10 (2003): 179-214.
17 TNTP, The Widget Efect, (New
York: TNTP, 2009), accessed January
21, 2014, http://widgetefect.org/.
10 CAROLINACAN INVESTING IN EXCELLENCE
profession, and does nothing to keep those who show the most success
on the job.
So what does the research say about reversing this dynamic and
building a system that will attract, reward and retain exceptional
educators?
Thebenetsofhigherbasepay
Great teachers are worth a lotto our students and our state. Research-
ers have estimated that a teacher in the top 15 percent of their profession
can raise the value of each of her students lifetime earnings by more
than $20,000 compared to an average teacher, in turn contributing
more than $400,000 in economic benets every year.18 And these esti-
mates dont even account for the creative, moral and social capital that
those teachers instill in their students.
In the short term, we may not be able to match these numbers and
pay North Carolinas great teachers what they are truly worth. But
over the next few years, we can bring average salaries more in line with
neighboring states and competing professions. Research suggests that
in paying attention to base salaries, we can grow the teacher applicant
pool and improve the retention rate, which will ultimately ensure that
more efective teachers are entering (and staying in) our classrooms.
Growing the applicant pool
Economists have long shown that if wages increase in a given industry,
the number of candidates attracted to that industry will also increase, a
correlation that also holds true for education.19 And if there is a larger
applicant pool, there will be more high-ability teachers available to re-
place retiring, departing or dismissed teachers.20 With rigorous screen-
ing processes, infusing more excellent teachers into the system will in
turn improve the average quality of teachers statewide.21
Countries that outperform the U.S. on international assessments
have applied these lessons well. A recent McKinsey & Company analysis
shows that competitive compensation is one of nine critical factors in
recruiting talented individuals to the classroom and retaining them.
For example, South Korea and Singaporecountries with some of the
best student achievement in the worldboth provide compensation in
line with other professions that attract top-tier applicants. Mid-career
teachers in South Korea and Singapore earn more than twice as much
as mid-career teachers in the U.S. (relative to each countrys GDP).22
McKinseys U.S. market research also shows how higher salaries can
attract more top-tier talent to teaching. They estimate that boosting the
average starting teacher salary to $65,000 per year would increase the
18 Raj Chetty, John N. Friedman,
and Jonah E. Rockof, Measuring
the Impacts of Teachers II:
Teacher Value-Added and Student
Outcomes in Adulthood, National
Bureau of Economic Research
(2013), accessed January 21, 2014,
http://www.hks.harvard.edu/fs/
jfriedm/value_added2.pdf.
19 Edward P. Lazear, Teacher
Incentives, Swedish Economic
Policy Review 10 (2003): 179214.
20 Byron Auguste, Paul Kihn, and
Matt Miller, Closing the talent gap:
Attracting and retaining top-third
graduates to careers in teaching,
McKinsey & Company (2010),
accessed January 21, 2014, http://
www.mckinseyonsociety.com/
downloads/reports/Education/
Closing_the_talent_gap.pdf.
21 Research suggests that base pay
raises are more efective at improving
teacher quality when applicants can
be screened for quality, either on
the front end with more selective
teacher preparation programs, or on
the back end with teacher dismissal
policies based on high-stakes
evaluations (Dale Ballou and Michael
Podgursky, Recruiting Smarter
Teachers, The Journal of Human
Resources 30 (1995): 326338).
22 Byron Auguste, Paul Kihn, and
Matt Miller, Closing the talent gap:
Attracting and retaining top-third
graduates to careers in teaching,
McKinsey & Company (2010),
accessed January 21, 2014, http://
www.mckinseyonsociety.com/
downloads/reports/Education/
Closing_the_talent_gap.pdf.
11 CAROLINACAN INVESTING IN EXCELLENCE
number of top-tier applicants who join the classroom by about 15 per-
cent. If teachers had the potential to max out their earnings at $150,000
per year, the number of top-tier hires could grow by nearly 40 percent.
This is precisely where leading districts and states are headed in
teacher compensation policy. Washington, D.C., which saw the largest
reading and math gains of any state on the 2013 National Assessment
of Educational Progress,23 has made it possible for a highly efective
teacher in a low-income school to earn nearly $80,000 in her rst year
on the job and up to $130,000 by her ninth.24 By contrast, it can take
even the best North Carolina teacher up to 15 years to earn $40,000.
Retaining teachers
In addition to attracting more talented applicants to the teaching pro-
fession, higher base pay can also help retain talented new teachers.
Data from more than two decades of research show that higher salaries
reduce teacher turnover.25 Studies have estimated, for example, that
raising pay by 10 percent reduces the likelihood of new teachers leaving
their districts by 1 to 2 percent,26 and that new teachers stay in teaching
longer when their salaries are higher relative to other local employ-
ment options.27
A program in our own state supports these ndings. Between 2001
and 2004, certied STEM teachers in high-poverty or low-performing
North Carolina schools were given an annual raise of $1,800 for con-
tinuing to work in those schools. The raise reduced turnover among the
targeted teachers by 17 percent.28
Solving the fundamental issue of fairness
The research overwhelmingly favors raising base pay for North Carolina
teachers to improve recruitment and retention, as well as student
learning. However, there is another issue at stake: fundamental fairness.
North Carolina teachers have seen a 16-percentage point drop in salary
since 2002. Simply put, they deserve better.
Craftingasalaryschedulethatinvestsinwhatmatters
To recruit highly efective teachers, retain them and maximize their
reach, North Carolina must also diferentiate pay based on factors that
research shows matter to teachers and students alike, including:
Teacher efectiveness, as captured by our state evaluation system (NCEES),
alongside other potential measures, such as peer or student surveys.
Leadership and reach to larger numbers of students, with excellence.
The demand and difculty of the position (for example, accounting
for whether the position is in an in-demand STEM eld, or at a high-
need school).
23 What states are making gains?
The Nations Report Card, accessed
January 24, 2014, http://
nationsreportcard.gov/reading_math
_2013/#/state-gains. D.C. made the
largest combined gains in reading
and math across fourth- and
eighth-grade.
24 Impact plus, DC Public Schools,
accessed January 24, 2014, http://
dc.gov/DCPS/Files/downloads/In-the
-Classroom/IMPACT%20Guidebooks/
IMPACTplus_Teachers.pdf.
25 Cassandra M. Guarino, Lucrecia
Santibanez, and Glenn A. Daley,
Teacher Recruitment and Retention:
A Review of the Recent Empirical
Literature, Review of Educational
Research 76 (2006): 173208.
26 Eric A. Hanushek, John F. Kain, and
Steven G. Rivkin, Do Higher Salaries
Buy Better Teachers? National
Bureau of Economic Research (1999),
accessed January 21, 2014, http://
www.nber.org/papers/w7082.
27 R. Mark Gritz and Neil D. Theobald,
The Efect of School District
Spending Priorities on Length of
Stay in Teaching, Journal of Human
Resources 31 (1996): 477512.
28 Charles Clotfelter, Elizabeth
Glennie, Helen Ladd, and Jacob
Vigdor, Would higher salaries keep
teachers in high-poverty schools?
Evidence from a policy intervention
in North Carolina, Journal of Public
Economics 92 (2008): 13521370.
NorthCarolina
teachershave
seena
16-percentage
pointdropin
salarysince
2002.Simply
put,they
deservebetter.
12 CAROLINACAN INVESTING IN EXCELLENCE

Fortunately, we have ample research and examples that North Carolina
leaders can draw from as they redesign our states teacher compensa-
tion system.
Diferentiating pay by efectiveness
High-performing professionals both inside and outside of the education
sector are drawn to careers where they receive recognition and rewards
for their excellence.29 While it is increasingly clear that performance
bonuses do not reliably incentivize current teachers to improve their
performance, research makes clear that adding a performance-based
component to pay structures can attract higher-performing candi-
dates.30 It can also keep excellent teachers in the classroom longer.31
In its recent national survey, The New Teacher Project asked highly
efective teachers which factors afect their decision to stay in teaching.
The surveyed teachers cited lockstep compensation, which fails to re-
ward teaching excellence, as a key deterrent. In fact, highly efective
teachers in certain districts were more than twice as likely as other
teachers to cite dissatisfaction with compensation as a reason for leaving
their school.32
In contrast, a recent study of the D.C. Public Schools diferentiated
compensation system (IMPACT) found substantially higher retention
rates for efective and highly efective teachers, as well as higher volun-
tary exit rates among low performers. Using a rigorous quantitative
methodology, researchers found that these trends are more likely to be
driven by the diferentiated compensation and teacher rating system
than other factors.33
In other sectors outside education, diferentiated pay has been shown
to improve retention among high-performers. A study from Public Im-
pact highlights pay with purpose as a key strategy for retaining high-
performing workers in other sectors. Diferentiated pay, timely raises
and overall competitive pay packages increased the likelihood of high
performers staying with their company.34
Diferentiating pay by teacher leadership and reach
In addition to nancial rewards, high-performing individuals are also driven
by challenge and meaningful opportunities to advance in their career.35
It is therefore unsurprising that for excellent teachers, professional
empowerment and career advancement are key drivers of job satisfac-
tion. In TNTPs 2012 survey, top-tier teachers were signicantly more
likely than others to cite dissatisfaction with career advancement op-
portunities as a reason for leaving their school.36 And among the college
graduates who scored in the top third on aptitude tests but chose not to
29 Edward P. Lazear, Teacher
Incentives, Swedish Economic
Policy Review 10 (2003): 179214.
30 Julie Kowal, Bryan C. Hassel,
and Emily Ayscue Hassel, Financial
Incentives for Hard-to-Staf
Positions: Cross-Sector Lessons
for Public Education, Center
for American Progress (2008),
accessed January 21, 2014, http://
www.americanprogress.org/issues/
education/report/2008/11/20/5197/
nancial-incentives-for-hard-to
-staf-positions/.
31 TNTP, The Irreplaceables:
Understanding the Real Retention
Crisis in Americas Urban Schools,
(New York: TNTP, 2012), accessed
January 21, 2014, http://tntp.org/
irreplaceables.
32 Ibid.
33 Thomas Dee and James Wyckof,
Incentives, Selection, and Teacher
Performance: Evidence from
IMPACT, National Bureau of
Economic Research (2013),
accessed January 27, 2014, http://
cepa.stanford.edu/sites/default/
les/w19529.pdf.
34 Joe Ableidinger and Julie Kowal,
Shooting for Stars: Cross-Sector
Lessons for Retaining High-
Performing Educators, Public Impact
(2010), accessed January 21, 2014,
http://publicimpact.com/shooting-
for-the-stars-cross-sector-lessons-
for-retaining-high-performing-
educators/.
35 Catherine Fisk Natale, Katherine
Bassett, Lynn Gaddis, and Katherine
McKnight, Creating Sustainable
Teacher Career Pathways: A 21st
Century Imperative, National Network
of State Teachers of the Year and
the Pearson Center for Educator
Efectiveness (2013), accessed
January 21, 2014, http://www.nnstoy.
org/download/Final%20updated
%20Research%20Report.pdf.
36 TNTP, The Irreplaceables:
Understanding the Real Retention
Crisis in Americas Urban Schools,
(New York: TNTP, 2012), accessed
January 21, 2014, http://tntp.org/
irreplaceables.
13 CAROLINACAN INVESTING IN EXCELLENCE
become teachers, 65 percent agree that teaching does not ofer oppor-
tunities to advance professionally.37 This is certainly the case in North
Carolina, where most teachers must leave the classroom and become
school or central ofce administrators to advance their careers.
In Charlotte-Mecklenburg, excellent teachers are already extending
their reach to more students and earning substantially more, all while
staying within regular per-pupil budgets. This teacher-led initiative,
part of Project L.I.F.T. and growing across the district, allows teachers
to redesign their jobs and take on new roles and responsibilities. Excel-
lent teachers lead multiple classrooms and specialize in certain subjects.
They also use technology to reach more students, and to plan and col-
laborate with other teachers.38 In Nashville, TN, schools are adopting a
similar approach, known as the Multi-Classroom Leadership model.
The model allows excellent teachers to lead and teach a team of teachers,
who in turn implement the lead teachers tools. The goal of the program
is to extend the reach of excellent teachers to at least 80 percent of all
students in the district.39
Other states have also worked leadership initiatives into their teacher
salary schedules. In 2013, Iowa passed a law empowering exceptional
teachers to become model, mentor, and eventually lead teachers, moving
up the salary schedule with each rung on the ladder. Mentor and lead
teachers reach more children by heading instructional teams and help-
ing evaluate and provide feedback to their peers.40 Arizona operates a
similar system, with the most efective teachers designing and imple-
menting grade-wide curriculums. Preliminary evidence from Arizona
suggests that students in schools with these teacher career pathways
perform better on statewide tests than students in demographically
similar schools.41
Updating the teacher salary schedule to reward efective teachers
nancially and with new leadership opportunities will allow North Car-
olina to align its spending with a research-backed, high-impact strategy
that will improve the teaching profession, and ultimately, student learning.
Diferentiating pay by demand and difculty of the position
With policies in place to attract, retain and extend the reach of excellent
teachers, it is also crucial to ensure that these teachers are reaching all
students, including those in hard-to-staf subjects and schools. Quality
teachers are scarce in hard-to-staf subjects and schools, a deciency
that plays a big part in those schools achievement gaps.42 In North Car-
olina, high-poverty schools are more likely to employ less experienced
teachers with lower aptitude scores.43
37 Byron Auguste, Paul Kihn, and
Matt Miller, Closing the talent gap:
Attracting and retaining top-third
graduates to careers in teaching,
McKinsey & Company (2010),
accessed January 21, 2014, http://
www.mckinseyonsociety.com/
downloads/reports/Education/
Closing_the_talent_gap.pdf.
39 Metro Nashville Public Schools
Innovation Zone, Public Impact,
accessed January 21, 2014, http://
opportunityculture.org/our-initiative/
participating-sites/mnps-innovation-
zone/.
40 Stephen Sawchuk, Iowa Bill
Creates Teacher Career-Ladder
Program, May 23, 2013, Education
Week, accessed January 24, 2014,
http://blogs.edweek.org/edweek/
teacherbeat/2013/05/iowa_bill
_creates_teacher_care.html.
41 Jane Dowling, Sheila E. Murphy,
and Baofeng Wang, The Efects
of the Career Ladder Program on
Student Achievement, Arizona
Department of Education (2007),
accessed January 21, 2014, http://
www.azed.gov/wp-content/uploads/
PDF/CareerLadderReport.pdf.
42 Steven Glazerman, Ali Protik,
Bing-ru Teh, Julie Bruch, and Jefrey
Max, Transfer Incentives for High-
Performing Teachers: Final Results
from a Multisite Randomized
Experiment, National Center for
Education Evaluation and Regional
Assistance, United States
Department of Education Institute
of Education Sciences (2013),
accessed January 21, 2014, http://ies.
ed.gov/ncee/pubs/20144003/
pdf/20144003.pdf.
43 Charles Clotfelter, Helen F.
Ladd, Jacob Vigdor, and Justin
Wheeler, High-Poverty Schools and
the Distribution of Teachers and
Principals, North Carolina Law
Review 85 (2007): 13451379.
38 Charlotte-Mecklenburg Schools
and Project L.I.F.T., Public Impact,
accessed January 21, 2014, http://
opportunityculture.org/our-initiative/
participating-sites/cms-project-lift/.
14 CAROLINACAN INVESTING IN EXCELLENCE
Our state can help reverse this trend by using nancial incentives to
attract excellent teachers to hard-to-staf subjects and schools. Many
other sectors use compensating diferentials, including medicine, the
military, the civil service and private industry, with employees typically
earning 10 to 30 percent more than their base salary to take on more
challenging positions.44
Research from North Carolina shows that nancial incentives
could help high-need schools substantially boost teacher quality. For
example, researchers estimate that a predominantly minority school
in a predominantly minority district could attract teachers of the same
ability level as those in a predominantly white school in a predomi-
nantly white district by raising base pay by 14 percent.45
One North Carolina district has put hard-to-staf pay supplements
to work, and seen impressive results. The Guilford County Mission
Possible program ofered teachers a recruiting incentive ranging from
$2,500 to $10,000 to move to a hard-to-staf subject or school. Teachers
received an additional bonus ranging from $2,500 to $5,000 if they
demonstrated high value-added scores after making the switch. An
evaluation of the program showed that Mission Possible substantially
boosted applications for hard-to-staf positions and schools, and also
reduced turnover in those positions.46
A similar program known as the Talent Transfer Initiative ran across
seven states and 10 districts, ofering teachers with the most impressive
student growth $20,000 to switch to a hard-to-staf school for a minimum
of two years. As a result, top-tier teachers lled nine of every 10 targeted
vacancies, and reading and math scores improved more in the schools
that received those teachers than in similar schools that did not.47
Policyrecommendations
In light of these research ndings, we recommend two policy measures
to better attract, retain and reward excellent teachers in North Carolina.
1

Make a multi-year commitment to bring starting pay and

average salaries in line with neighboring states.
In the long run, excellent teachers must be able to earn a maximum salary
rivaling other well-paying professions if North Carolina hopes to attract
3
44 Julie Kowal, Bryan C. Hassel, and
Emily Ayscue Hassel, Financial
Incentives for Hard-to-Staf Positions:
Cross-Sector Lessons for Public
Education, Center for American
Progress (2008), accessed January
21, 2014, http://www.americanprogress.
org/issues/education/report/2008/
11/20/5197/nancial-incentives-for-
hard-to-staf-positions/.
45 Charles T. Clotfelter, Helen F.
Ladd, and Jacob L. Vigdor, Teacher
Mobility, School Segregation, and
Pay-Based Policies to Level the
Playing Field, National Center for
Analysis of Longitudinal Data in
Education Research (2010), accessed
January 21, 2014, http://www.urban.
org/uploadedpdf/1001429-teacher
-mobility.pdf.
46 Holli Gottschall Bayonas, Guilford
County Schools Mission Possible
Program: Year 3 (200809) External
Evaluation Report, SERVE Center,
The University of North Carolina at
Greensboro (2010), accessed
January 21, 2014, http://www1.gcsnc.
com/depts/mission_possible/pdf/
District%20MP%20Year%203%20
Report.pdf.
47 Steven Glazerman, Ali Protik,
Bing-ru Teh, Julie Bruch, and Jefrey
Max, Transfer Incentives for
High-Performing Teachers: Final
Results from a Multisite Randomized
Experiment, National Center for
Education Evaluation and Regional
Assistance, United States
Department of Education Institute
of Education Sciences (2013),
accessed January 21, 2014, http://ies.
ed.gov/ncee/pubs/20144003/
pdf/20144003.pdf.
15 CAROLINACAN INVESTING IN EXCELLENCE
and retain the best and brightest people to teach in our schools. But the
rst step is to invest in salary increases that will put North Carolina on
par with neighboring statesour primary competitors in the teacher
labor poolin both starting and average salaries. We recommend the
following goals and timetable:
Give teachers the recognition and encouragement they deserve by in-
creasing base pay by at least 4 percent in 2014.
Increase starting base pay for teachers with a bachelors degree to
$36,000 by 2016, which would put beginning teachers ahead of their
peers in South Carolina, Georgia and Tennessee, and make the state
much more competitive with Virginia.
Commit to ongoing investments so that by 2020, North Carolina is the
leader in the southeast in both starting and average teacher salaries.
2
Restructure the state salary schedule to pay
for what matters.
Focus salary increases in the early years of a teachers career, when teachers
tend to grow the most in terms of their skill and impact on student learning.
Despite evidence from a decade of research showing that experience-
based gains in teacher performance mostly accrue during the rst ve
years in the classroom,48 North Carolina still spreads experience-based
raises over the entire course of a teachers career. Moreover, those
raises have become even more back-loaded due to recent pay freezes
that have prevented new teachers from earning any raise at all.49
We recommend an updated salary schedule that allocates experience-
based raises more heavily in the rst ve years of a teachers career. For
one example, lawmakers might look to Tennessee, which recently elim-
inated experience-based raises after the 11
th
year of teaching and redi-
rected funds to teachers earlier years.50
Pay for advanced degrees when they matter. We recommend reinstating
salary supplements for advanced degrees when they reect content
knowledge that is essential to student achievement. For example, a high
school algebra teacher should not be paid more for a masters degree in
education, but should be eligible for a nancial reward for a masters or
doctoral degree in mathematics.51
Create career pathways that let teachers grow in their careers, reach
more students and earn accompanying salary increases. We recom-
mend that North Carolina recognize and reward excellent teachers
48 Jennifer King Rice, The Impact
of Teacher Experience: Examining
the Evidence and Policy Implications,
National Center for Analysis of
Longitudinal Data in Education
Research (2010), accessed January
24, 2014, http://www.urban.org/
uploadedpdf/1001455-impact-teacher
-experience.pdf.
49 Salary Guides, North Carolina
Department of Public Instruction,
accessed January 24, 2014, http://
www.ncpublicschools.org/fbs/
nance/salary/.
50 State Salary Schedule, Tennessee
Department of Education, accessed
January 24, 2014, http://www.tn.gov/
sbe/2013_documents/June2013
_Board_Meeting/III_A%202013-2014
_State_Minimum_Salary_Schedule_
Attachment.pdf.
51 In addition, as a matter of
fairness, we recommend in 2014 that
lawmakers move the efective date
back for NC teachers who are
eligible to receive pay supplements
for masters degrees, to enable
teachers currently in the process of
earning their degree to earn the
promised increase in compensation.
16 CAROLINACAN INVESTING IN EXCELLENCE
by providing salary increases when they take on leadership positions
that allow them to reach more students with excellence. This career
pathway should enable local districts to create dened roles for con-
sistently accomplished teachers to assume as they advance through
their careers. By integrating these roles into the new salary schedule,
the state can ensure that excellent teachers receive pay raises and new
responsibilities in tandem.
For example, a teacher might become eligible for a rst-tier leader-
ship position after three years at the highly efective level on the
states evaluation system, a role that would come with a 10 percent pay
increase. Similarly, a teacher might become eligible for a second-tier
leadership position after ve or more years at the highly efective level
and demonstration of additional leadership competencies, where they
could earn an additional 20 percent in base salary.
In any system, teachers must be able to assume leadership positions
that allow them to reach more students, especially without requiring
them to leave the classroom entirely. For example, through Public Im-
pacts Opportunity Culture Initiative, excellent teachers in Charlotte-
Mecklenburg lead multiple classrooms and use technology to reach
more students.52 In Nashville, excellent teachers lead teams of teachers
and provide those teams with tools they can use in the classroom.53 The
TAP System ofers similar opportunities to teachers in rural Tennessee
districts, such as Athens City Schools.54 There, excellent teachers can
become master and mentor teachers, positions that allow them to
coach and mentor other teachers while earning pay supplements and
remaining in the classroom.55
Provide additional incentives for hard-to-staf schools and subjects.
Finally, we recommend allowing consistently excellent teachers in
hard-to-staf subjects and schools to move more quickly up the pay
scale. The IMPACT incentive system used in D.C. public schools ofers
a useful model: a highly efective teacher in a high-poverty, low-per-
forming school can earn $22,000 more per year than the same teacher
in another school.56 North Carolinas own Guilford County does some-
thing similar through its Mission Possible program.57 And Tennessees
new diferentiated pay system similarly encourages districts to reward
excellent teachers in high-need schools.58
Makingcompensationreformafordable
Raising base pay will require new expenditures. The 4-percent increase
proposed above would cost the state an estimated $187.2 million. Raising
starting teacher salaries would require additional investments in the
52 Charlotte-Mecklenburg Schools
and Project L.I.F.T., Public Impact,
accessed January 21, 2014, http://
opportunityculture.org/our-initiative/
participating-sites/cms-project-lift/.
53 Metro Nashville Public Schools
Innovation Zone, Public Impact,
accessed January 21, 2014, http://
opportunityculture.org/our
-initiative/participating-sites/
mnps-innovation-zone/.
54 Meet TAPs New Districts in
Tennessee, Minnesota and Iowa,
TAP, accessed January, 21, 2014,
http://www.tapsystem.org/
publications/tap-in-focus-III-teacher-
incentive-fund-districts.pdf.
55 Multiple Career Paths, TAP,
accessed January 21, 2014, http://
www.tapsystem.org/action/action.
taf?page=mcp.
56 Impact plus, DC Public Schools,
accessed January 24, 2014, http://
dc.gov/DCPS/Files/downloads/
In-the-Classroom/IMPACT%20
Guidebooks/IMPACTplus_Teachers.pdf.
57 Holli Gottschall Bayonas,
Guilford County Schools Mission
Possible Program: Year 3 (200809)
External Evaluation Report, SERVE
Center, The University of North
Carolina at Greensboro (2010),
accessed January 21, 2014, http://
www1.gcsnc.com/depts/mission
_possible/pdf/District%20MP%20
Year%203%20Report.pdf.
58 Diferentiated Pay Plan
Guidelines, Tennessee State Board
of Education, accessed January 24,
2014, www.tn.gov/sbe/2013
_documents/April2013_Board
_Meeting/III_E_Diferentiated_Pay
_Plan_Cover_Sheet.pdf.
17 CAROLINACAN INVESTING IN EXCELLENCE
millions. While these investments are sizeable, in the scheme of overall
education budgets they present a modest expense, particularly in light of
the states improving economic health. Importantly, they are also catch-
up investments that help make up for the delayed raises North Carolina
teachers have waited for since the beginning of the Great Recession.
Unlike percentage-based raises, the reforms we recommend to the
state salary schedule can be accomplished with little to no additional
ongoing funding. The solution is simple: after accounting for transition
costs, we can reallocate existing funds to pay for what matters.
There are numerous ways to make reallocation work. For example, a
portion of funds that North Carolina dedicated in the past to advanced
degrees, and a portion of funding used for experience-based raises after
ve to seven years, could be reallocated to reward teacher excellence
and leadership, and to incentivize excellent teachers to teach in hard-
to-staf positions and schools.59 Part of districts professional devel-
opment budgets may also be reallocated to raise salaries for highly ef-
fective teachers who take on leadership roles.60 Similarly, districts can
pay highly efective teachers more to take on more students, while bet-
ter using paraprofessionals and technology to keep class sizes and the
overall budget at.61
Aexiblecompensationsystem
Tennessees diferentiated pay legislation sets guidelines and require-
ments for districts but allows them to customize their pay systems to
meet local needs. We recommend a similar approach in North Carolina.
North Carolinas updated approach to teacher compensation
should set clear guidelines and requirements at the state level, while
at the same time enabling districts to customize their pay systems to
meet local needs. Similar to Tennessees new diferentiated pay system,
North Carolina should provide a default salary schedule (with higher
base pay) that sets out a basic structure for rewarding excellence, lead-
ership and service in hard-to-staf positions and schools, which most or
perhaps all districts will implement. But it should also explicitly permit
districts to adjust the schedule to account for their own local priorities.
Districts should also be able to grant principals additional autonomy
over school-based compensation decisions, and to propose alternative
plans, such as those enabled by Session Law 2012142 Section 7A.10(a),
that align with the principles underlying the states updated schedule.62
59 For example, see proposal from
Duke University economist Jacob
Vigdor in Scrap the Sacrosanct
Salary Schedule, Education Next 8
(2008): 3642, accessed January
29, 2014, http://educationnext.org/
scrap-the-sacrosanct-salary-schedule/.
60 Public Impact, Redesigning
Schools to Reach Every Student
with Excellent Teachers: Six Ways
to Pay All Teachers More Within
Budget, (Chapel Hill, NC: Public
Impact 2013), accessed January 21,
2014, http://publicimpact.com/6
-ways-to-pay-all-teachers-more
-within-budget/.
61 For example, see Public Impact
Opportunity Culture Initiative and
report from Michael Hansen, Right
-sizing the Classroom: Making the
Most of Great Teachers, Thomas B.
Fordham Institute (2013), accessed
January 21, 2014, http://www.
edexcellence.net/publications/right
-sizing-the-classroom-making-the
-most-of-great-teachers.
62 Session Law 2012-142, General
Assembly of North Carolina Session
2011, accessed January 24, 2014,
http://www.ncleg.net/Sessions/2011/
Bills/House/PDF/H950v7.pdf.
18 CAROLINACAN INVESTING IN EXCELLENCE
Conclusion
If we look closely, we may nd there is a bright side to North Carolinas
current salary crisis. We have a great opportunity to make overdue in-
vestments in our states great teachers, and to direct state dollars to-
ward factors that matter most to students success. We have indeed fallen
behind other states in average salaries. But in the meantime, weve
gained a wealth of experience and research on pay innovations in other
states that can help North Carolina design the smartest compensation
system in the nation.
Building on the principles outlined herean updated salary schedule
that raises the pay oor, allows teachers to make more earlier and rewards
excellent teachers with career opportunities and related pay increases
we can position North Carolina as the best state in the nation to work in
and grow as a teacher.
AboutCarolinaCAN
North Carolinas achievement gapthe persistent and signicant dis-
parity between the academic achievement of low-income and minority
children and their white, middle-class peersis the most urgent social
and economic problem facing our state. We have one of the countrys
largest achievement gaps between our haves and have-nots, and each and
every one of us is paying the price. But North Carolina, and the entire na-
tion, was built on the promise of universal education. Public schools are
the cornerstone of our democracy. Our future is inextricably linked to
the education of our childrenall of them.
Our mission is to close the academic achievement gaps that divide
our students by creating a common vision of education reform, building
the case for that vision with trusted research and policy work, and then
coalescing powerful messengers to shape public policy to give a high-
quality education to all North Carolina kids, regardless of their address.
www.carolinacan.org